Two little known facts about OPALCO’s “Broadband Vision”:
1) OPALCO has approved over $5 million for “backbone” network investments, including $3 million already spent in infrastructure, $1.2 million on broadband studies, and a significant chunk to procure 700 MHz frequency.
2) the Board adopted the policy that these “backbone” costs are to be underwritten 100% by members through electricity rates, instead of being partially recovered from Century Link, ISPs and broadband users through lease or network fees.
$5 million amounts to roughly a 2.9% “tax” on the entire OPALCO membership assuming these costs are paid over 10 years.
We want fast, reliable internet, too. But we have questions and concerns. Are we happy about our electricity rates being “padded” to subsidize broadband and cellular users? Specifically, are each of the “backbone” network investments justifiable as an improvement in the electrical system? Or do some investments (e.g. procurement of the 700 MHz frequency) make sense only if you count their non-electricity benefits — while making electricity users shoulder the costs? If some of these investments only are viable with a cross-subsidy, are we okay with that? If so, to what extent are we willing to cross-subsidize? Can OPALCO show a cost-benefit analysis to ensure our padded electricity costs do not exceed benefits to local economic development? And even then, we need to acknowledge equity issues: winners and losers are not necessarily the same.
So it’s best and most equitable if internet or cellular users pay their fair share of costs through service fees while electricity users pay their own fees. OPALCO can still facilitate broadband roll-out without having to distort prices and investment decisions with cross-subsidization. This just means that if an ISP or broadband client wants to use OPALCO’s backbone network, s/he is expected to pay appropriate lease/service fee. Fair and square.Perhaps it’s wise to pause and re-think the board’s decision. Put the 700 MHz frequency procurement process on hold until its economic merit, without cross-subsidization, is evident.
We admire OPALCO’s sincere effort to facilitate local economic development. But broadband is not the only area where OPALCO can make a difference. Green energy, energy efficiency, green designs and construction are potential areas of investment and job creation with high economic, social and environmental returns (and a lot less risk compared to telecom). We wish to see OPALCO become a visionary leader on this front, leading and collaborating with the county and its members towards a dynamic, resilient future in its new chapter of the next 75 years.
Chom & Chris Greacen, Lopez Island
Quality broadband will be of great benefit to the viability of working on Orcas in ways that are integrated fully with our society as a whole–profit, non-profit, cultural, social.
Of issue here is not whether broadband has great benefits (which no one doubts), but rather who should shoulder the $5 million price tag (thus far) of “backbone” network infrastructure: broadband users or electricity users or both? The network does serve both groups but currently the OPALCO policy is such that these costs only get passed on to electricity users but not broadband or cellular users through Century Link or Island Network or others. Can broadband benefits be achieved in an equitable way without unfairly burdening electricity users, some of whom are on limited fixed income and may not user internet or cellular service at all? Basically there is no free lunch (at least not any more because the federal “rural broadband” stimulus is long gone), so to get higher speed internet, someone will have to pay for it: either broadband users, the county or someone else in the community (say, electricity users). Wouldn’t it be best for those who derive benefits from the communication network infrastructure to pay their fair share of the costs? This is an issue on which I hope members of OPALCO will have a say.
Thank you for your comments Chom and Chris. I am glad you raise this issue because I have thought this myself. As you say, “Wouldn’t it be best for those who derive benefits from the communication network infrastructure to pay their fair share of the costs …currently the OPALCO policy is such that these costs only get passed on to electricity users … some of whom are on limited fixed income and may not use internet or cellular service at all?
At this time, we like: “the policy that these “backbone” costs are to be partially recovered from Century Link, ISPs and broadband users through lease or network fees”, rather than just electricity users.
As you may have heard, John Bogert just resigned from OPALCO Board, partly over broadband decisions. This is a great loss for OPALCO membership as John brought a very valuable perspectives to the board. John is the second board member to resign since June, following George Mulligan’s resignation. In my experience attending OPALCO board meetings and interacting with them, both John Bogert and George Mulligan represented the voice of financial prudence on broadband issues.
The series of resignations is quite alarming to me and most likely the entire OPALCO membership. It is indicative of deep disagreements within the board, inability to hear and work out differing opinions, and perhaps more. It is also indicative of how well or poorly the process of making crucial decisions within OPALCO is working for the board of directors, staff and general membership. OPALCO is a coop but we do not really have access to or understand what’s really going on inside that resulted in two resignations of very qualified, competent board members.
OPALCO is in a major transition and its long-accumulated financial and social capital might be at risk if certain aspects of its modus operandi don’t change. In bringing up various issues for discussion, I’m not very attached to certain outcomes but just want to see that the process by which major decisions involving OPALCO’s and our future as members get made in a participatory, transparent and accountable manner, for the best interest of OPALCO and its members as a whole.
I hope we OPALCO members will get to learn more about what goes on behind close doors (exclusive “board retreats” and “executive-only sessions”) and decisions that led to such policies as the one discussed above and two board resignations.